Erik Schafhauser Zürich

Morning Brew July 07 2022

Morning Brew 1 minute to read
Erik Schafhauser

Senior Relationship Manager

Summary:  Looking for the big picture


 Good Morning,

Markets remain fascinating with FX particularly so

The USD Index trades as high as 107.25 before giving up ground to 106.83. EURUSD is at 1.0203, GBPUSD 1.1950 and USJPY at 13570. Gold and Silver sold off yesterday but could recover to 1746 and 19.36 for now. USDTRY is approaching recent highs and is trading at 17.24.

10 Year rates rise to 2.96 and the 2/10 rates remain inverted hinting at a recession - it basically shows the expectation that further down the timeline, rates will fall again. 

With commodity under pressure and energy the main cause of rising costs of living, inflationary pressures may recede a little. This should not necessarily be the case in Europe where fears of a gas shortage remain and German Minister Habeck warns of a recession in Germany. The Bund Future has risen significantly the last few days, hinting the ECB may turn out more dovish than previously expected.

Equities are in a bit of tense stasis. With all three US Indexes closing less than 0.5% away from the previous day. German stocks are a bit the outlier, gaining 1.6% yesterday and the future gains an additional 1%.

The FOMC Minutes confirmed the Fed has a tough stance on inflation but  hint that FOMC members were  concerned with "larger-than-anticipated"  impact by the rate hikes on economic growth.

The UK remains in turmoil as Boris Johnson refuses to resign and his staff is resigning left right and center.

Our Strats Team is extremely active in all markets, please find some key articles below:

Crude oil breaking rising trend line finding support at key levels. Will they hold?

DAX/GER40 taking out March lows. Will it continue lower?

Gold broken key support. Silver dropping like a stone. How low can they go?

Junk rally on recession fears, Amazon partnering with Grubhub

Can Bitcoin continue to pay for its security?

There are few tier 1 news today, the Swiss Forex reserves are interesting for anyone who trades CHF, that aside the usual Thursday US labor data and the Canadian PMI, all at 14:30.

Next key event is the US Non-Farm Payroll tomorrow, giving a hint on the next rate decision.

Watch commodity prices and any indications on Russian Gas deliveries to Europe.

As International Bond Markets seem to become a subject again, kindly be aware that there is decent number of mutual funds on the platform that give you access to professionally managed exposure to fixed income markets – in the last couple of years. Many of our clients stopped trading bonds simply due to le lack of attractiveness of the asset class. That seems to be changing.

If you would like some assistance, please contact us

Trade safely

 

Quarterly Outlook

01 /

  • Upending the global order at blinding speed

    Quarterly Outlook

    Upending the global order at blinding speed

    John J. Hardy

    Global Head of Macro Strategy

    We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ...
  • Equity outlook: The high cost of global fragmentation for US portfolios

    Quarterly Outlook

    Equity outlook: The high cost of global fragmentation for US portfolios

    Charu Chanana

    Chief Investment Strategist

  • Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Quarterly Outlook

    Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Jacob Falkencrone

    Global Head of Investment Strategy

  • Commodity Outlook: Commodities rally despite global uncertainty

    Quarterly Outlook

    Commodity Outlook: Commodities rally despite global uncertainty

    Ole Hansen

    Head of Commodity Strategy

  • Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    Quarterly Outlook

    Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    John J. Hardy

    Global Head of Macro Strategy

  • Equity Outlook: The ride just got rougher

    Quarterly Outlook

    Equity Outlook: The ride just got rougher

    Charu Chanana

    Chief Investment Strategist

  • China Outlook: The choice between retaliation or de-escalation

    Quarterly Outlook

    China Outlook: The choice between retaliation or de-escalation

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: A bumpy road ahead calls for diversification

    Quarterly Outlook

    Commodity Outlook: A bumpy road ahead calls for diversification

    Ole Hansen

    Head of Commodity Strategy

  • FX outlook: Tariffs drive USD strength, until...?

    Quarterly Outlook

    FX outlook: Tariffs drive USD strength, until...?

    John J. Hardy

    Global Head of Macro Strategy

  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

The information on or via the website is provided to you by Saxo Bank (Switzerland) Ltd. (“Saxo Bank”) for educational and information purposes only. The information should not be construed as an offer or recommendation to enter into any transaction or any particular service, nor should the contents be construed as advice of any other kind, for example of a tax or legal nature.

All trading carries risk. Loses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money.

Saxo Bank does not guarantee the accuracy, completeness, or usefulness of any information provided and shall not be responsible for any errors or omissions or for any losses or damages resulting from the use of such information.

The content of this website represents marketing material and is not the result of financial analysis or research. It has therefore has not been prepared in accordance with directives designed to promote the independence of financial/investment research and is not subject to any prohibition on dealing ahead of the dissemination of financial/investment research.

Saxo Bank (Schweiz) AG
The Circle 38
CH-8058
Zürich-Flughafen
Switzerland

Contact Saxo

Select region

Switzerland
Switzerland

All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) Ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law. 

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.